There were three reasons that Canopy executives and analysts pointed to for the revenue growth: Recreational weed sales grew, especially compared with the results Aurora reported Thursday; the domestic and international medical marijuana business ticked up, potentially due to Aurora’s struggles; and the company’s marijuana-paraphernalia acquisitions grew sales nearly 50%, while most Canadian cannabis companies, including Aurora, have not acquired large, established accessories businesses.

“Our top-line performance benefited from a broad base of growth in our core cannabis business, as well as our strategic acquisitions,” Canopy Chief Financial Officer Mike Lee said in a conference call Friday.

Lee said in the call that the company’s recreational weed revenue in Canada grew because it sold more of its expensive pot, while Aurora said its customers were more interested in cheap weed. Sales of pre-rolled joints jumped more than 50%, as Canopy’s balanced portfolio of marijuana brands seemed to pay off.

“Canopy does not need to chase sub-value pricing. Canopy’s recreational portfolio is balanced between tiers (40% premium, 30% mainstream, 30% value) with broad momentum, and it will not chase sub-value pricing,” Piper Sandler analyst Michael Lavery wrote in a note to clients Friday. Lavery raised his target price to $28 after the results and has the equivalent of a buy rating on Canopy stock.

The company’s business-to-consumer sales also increased, which was in part a result of owning its own retail operations. Canopy added 12 retail locations during the quarter to bring its total retail footprint to 27 across the country, and increased same-store sales 11%. Aurora opted to become involved in retail operations via its investment in Alberta-based liquor retailer Alcanna Inc. CLIQ, +0.77% instead of running its own retail shops.

Canopy’s medical cannabis sales expanded in the fiscal third quarter both in Canada and overseas, with the latter possibly helped by Aurora’s struggles. Aurora’s international sales declined in part because Germany held up some product Aurora shipped to patients in that country.

“Our sales in Germany benefited from opportunistic sales to fill supply gaps created by a regulatory hold on products of another vendor,” Lee said in the earnings call.

A number of Canopy Growth’s acquisitions showed growth as well, amounting to a total of 22% of its revenue, with hardware used to consume marijuana a key focus. Its cannabinoid medicine maker C3 grew revenue by 5% versus the prior quarter. Vaporizer sales from its Storz & Bickle acquisition grew 46% over the last quarter, because of “organic growth” and the company’ benefited from seasonal sales of roughly C$5 million.

Storz & Bickle makes a number of cannabis consumption accessories, including vape devices, which includes the venerable Volcano, well-known among cannabis enthusiasts even prior to Canopy buying the German company. Other hardware acquisitions This Works and Biosteel also boosted the company’s sales, Lee said.

It was not all good news for Canopy, however. Jefferies analyst Owen Bennett wrote in a note to clients early Friday that while the headline numbers will “provide relief,” areas of concern remain in the details.

Bennett said the company’s market share declined to 22%, despite the fact that the company nearly doubled its retail footprint; Canopy also issued guidance with a “modest” fiscal fourth-quarter sales increase, which suggests their market share will continue to decline. Bennett has the equivalent of a sell rating on the name with a C$21 target price.

U.S.-traded shares of Canopy Growth have lost half their value in the past year as the S&P 500 SPX, +0.18% has gained 23%. The ETFMG Alternative Harvest ETF MJ, +3.72% has fallen 53% in the past year and the Horizons Marijuana Life Sciences Index ETF HMMJ, +5.85% fell 60%.

Max A. Cherney

Max A. Cherney is a MarketWatch reporter based in San Francisco. Follow him on Twitter @chernandburn.